Sysco, as we all know, is a food distribution company, with a major market share in hot food restaurant industry. In year 2008, it earned $1.1 billion on sales of $37 billion, a record in its history. Contrastingly, the first three quarters of this year seems to indicate that this will be down year of Sysco. This will be first down year for Sysco since its inception. Time will tell how the end market of Sysco evolves. At this point in time, I do not know whether it’s an inflection point for demand of its services, or peak of growth in restaurant industry, or it’s an indicator that North American restaurant industry will shrink. However, I am certain that Sysco is at a cross road.
I am long term dividend growth investor in Sysco. Therefore, I need to review to ensure that company is (and will be) capable of paying me growing dividends. continue reading rest of the article….
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Which High Do You Prefer?
Do you prefer a company with high profitability, high revenue, high income, high dividends, high market share, high cash flow, etc. Aren’t all these highs depicting a good picture about any given company’s state of business? We can find an answer to this in the concept of value investing i.e. wide moat and under pricing. These are the two key ingredients for value investing. Here, the concept of wide moat and under pricing is in the context of its business environment or competition. It is a relative term. Similarly, when we think about any given company’s financial metric, we need to look at it in relative terms. High profitability or high income, or high EPS growth rate as a standalone does not provide a true picture.
We can get a true picture by looking for consistency. Two simple statistical measures of average and standard deviation can help us measure consistency. A standard deviation that is narrow and lower than average is a good observation. The table below shows some examples of randomly selected financial metric for few companies. continue reading rest of the article….